The Abraaj Group is acquiring Java House from fellow private equity investor, Emerging Capital Partners, and the African coffee chain’s founder, Kevin Ashley, in an undisclosed transaction. The deal, which is being transacted through Abraaj’s Africa Fund III, follows a year-long auction process which reportedly attracted as many as twelve non-binding bids for the company.
While financial terms of the deal were not disclosed, the Financial Times reports that Emerging Capital Partners (ECP) was looking for bids in the $100 million range for the company. ECP first backed Java House in 2012, taking a majority stake in the company. Since then, the private equity investor has invested more capital to help fund the firm’s East African expansion plans. During its three-year ownership, Java House has expanded from having 13 outlets in Nairobi to having 60 outlets in 10 cities in Kenya, Rwanda and Uganda.
Continuing the expansion of the company’s three brands—Java House, Planet Yogurt and 360 Degrees Artisan Pizza—will remain very much part of the firm’s strategy under Abraaj’s ownership. “There are themes that can be introduced on the Java platform, and geographic expansion further into Uganda and Rwanda plus other East African countries,” Ashish Patel, who led the deal for Abraaj, told the Wall Street Journal. Tanzania is a logical market for targeted expansion given its geographic proximity, he added, with Ghana and Nigeria offering attractive market opportunity for the brands in West Africa.
Freshfields Bruckhaus Deringer and Bowmans Kenya provided legal advice for the deal, which will close once customary conditions have been met and regulatory approvals have been granted. Abraaj was given financial and tax advice by PwC. Rothschild and KPMG represented ECP, with law firm Akin Gump acting for the private equity fund manager.